Responding to uncertainty: syndication partner choice by foreign venture capital firms in China

Autor: Martin Kenney, Donald Patton, Xiao Huang
Rok vydání: 2015
Předmět:
Zdroj: Venture Capital. 17:215-235
ISSN: 1464-5343
1369-1066
DOI: 10.1080/13691066.2015.1051737
Popis: Cross-border venture capital investment has grown dramatically. Drawing upon observations about the liability of foreignness, previous research has shown that foreign venture capitalists (VCs) tend to partner with local VCs in order to offset information asymmetry and the liabilities of foreignness. Much of the literature has suggested that local VCs should help reduce operational uncertainty. This paper examines syndication partner choice in China, which today is likely the most uncertain environment in which foreign VCs operate on a large scale. This provides an ideal environment for understanding partner selection under uncertainty. Our results show that foreign investors are more likely to choose Chinese investors in later rounds and in more mature portfolio firms. While foreign firms with more Chinese experience are more likely to co-invest with Chinese VCs, the older foreign VC firms are less likely to do so. Remarkably, having a Chinese office made foreign VCs less likely to co-invest. In seed-stag...
Databáze: OpenAIRE
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